The Internal Revenue Service announced that starting in 2017 it will begin to use private collection services for 2017 for “inactive tax receivables”. This means that if you owe taxes for prior years and have not already setup an agreement, filed an offer in compromise or established currently not collectible etc. on your account, then it is possible that you will be contacted by a private collection agency. The procedure will involved receiving an official notice from the IRS that you owe taxes and that they are being transferred to a private collection agency.

This is not the first time this has occurred with tax collection and the IRS. The IRS has previously chosen this option in the past (2006-2009). It has previously met with taxpayer complaints and was terminated due to aggressive practice leading to consumer complaints (See Bluffton Today, 10/5/2016). In theory, this should speed up resolution of these cases. Often times it is extremely difficult to complete a call to the IRS’s Automated Collection Service (ACS). These contractors should add more resources to an already strained governmental agency. Of course time will tell how it all works out. But taxpayers should be aware of this change for 2017; especially if they are one who are “inactive” and need to resolve their tax problems.

Please note that when dealing with private collection agencies, they will not ask for payment on a prepaid debit card. Electronic payment options may be found on Your Tax Bill. Check Payments should be payable to the U.S Treasury and sent directly to IRS, not the private collection agencies.

The IRS will assign cases to the following private collection agencies:

– Conserve (Fairport, New York)
– Pioneer (Horseheads, New York)
– Performant (Livermore, California)
– CBE Group (Cedar Falls, Iowa)

If you have any questions regarding this issues, feel free to contact our office.

For more complete information See; Also See News Release IR 2016-125; Thomson Reuters Checkpoint “Five Minute Tax Briefing” No. 2016-19, 10/11/16